Time short to save clean-energy jobs

We don’t have much time. Failure to extend tax incentives for clean energy now will result in jobs lost, reduced U.S. manufacturing competitiveness in a growing, multitrillion-dollar market and a blow to our economic recovery. Despite recent years of solid growth, several industries — including the wind, biofuels and energy efficiency sectors — have already begun cutting workers. Unless Congress acts immediately, more layoffs are inevitable. 

Recent economic data confirm how manufacturing is driving America’s economic recovery. The Bureau of Labor Statistics showed the economy gaining 243,000 jobs last month — 50,000 of them in the manufacturing sector. Clean energy plays an important role in creating new jobs and greater energy production. The biofuels industry supports tens of thousands of additional workers and farmers, with enormous promise as new technologies advance. U.S. wind capacity has reached 42,000 megawatts — enough to power 10 million homes. Over the last four years, wind has accounted for more than 35 percent of all new generating capacity, second only to natural gas.

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These clean-energy jobs are made in America. As a recent Congressional Research Service report detailed, the United States now has more than 420 wind-component manufacturing facilities in 43 states. The domestic content of wind turbines installed in the United States is now greater than 65 percent. This means more U.S. manufacturing jobs today and a robust domestic supply chain that will keep the industry here for years to come. 

In December, the Senate Finance subcommittee on Energy, Natural Resources and Infrastructure heard testimony highlighting the need to extend these vital industry incentives. But despite widespread support from both business and environmental groups, important provisions — such as energy efficiency tax credits for homeowners and renewable-energy grants in lieu of tax credits — were allowed to lapse at the end of 2011. We are more than a month into 2012 and these crucial provisions still have not been extended; property owners and markets are reacting adversely to this uncertainty. 

Incentives promoting energy efficiency have profoundly positive effects. These industries are real. They employ hundreds of thousands of Americans, including many from the hard-hit construction sector, and are growing faster than the rest of the economy. Energy efficiency improvements, from homes to buildings to industrial sites, provide steady construction jobs that save Americans money and that cannot be exported. Our support means investing in real companies that produce American products. And consumers see real pocketbook savings at a time when high energy prices are a pressing concern for household budgets.

Evidence shows that the renewable energy grants that have expired and the production tax credits that will expire later this year are also job creators. Recent estimates of the direct jobs alone show that the solar industry supports more than 100,000 jobs, while the wind industry supports between 75,000 and 85,000. With solar, we find that average installed costs fell 20 percent just in the last year, and the industry installed a record 965 megawatts of photovoltaic in 2010. A recent report by the Bank of America and Merrill Lynch forecasts that within four years the United States will become the largest solar market in the world, significantly outpacing both Germany and China — if we don’t interrupt the industry’s progress.

Extending these credits is a bipartisan priority. The entire congressional delegation from Iowa — both Republicans and Democrats — has expressed support for an early extension of the production tax credit for wind. Last week, Kansas Gov. Sam Brownback and Iowa Gov. Terry Branstad urged the payroll tax conference committee to promptly extend the credit.

Congress has few opportunities to address this issue this year. The most promising opportunity is the current payroll tax conference between the Senate and the House. This group of lawmakers should not consider its job done until it has found a way to extend the job-creating credits that expired at the end of 2011, and to proactively extend the credits that will expire at the end of 2012.

We must act quickly. If we do not extend the production tax credit for wind by the end of the first quarter of this year, we will start to see lost jobs, slowed momentum and idled U.S. factories. Vestas, one of the largest wind turbine manufacturers in the country, already has announced that if Congress fails to extend the tax credit immediately, it will be forced to lay off 1,600 U.S. workers, and the major project developers have no projects planned for 2013.

By not supporting these industries — that is, by not offering the certainty and predictability that businesses need — we are making a decision to abandon young, promising companies that have already created tens of thousands of jobs. Generous federal subsidies for traditional fuel sources have led to substantial private investment and broad access to those sources across the country. For our future, and for the present, we must ensure that these new home-grown industries providing clean, domestic energy can attract similar investments and maintain their lead on the international competition. That is an excellent way to support America’s growth and prosperity.

Bingaman is chairman of the Senate Energy and Natural Resources Committee.


The Hill Special Report: Energy & Environment
♦ Sen. Shaheen: Energy efficiency is good policy, good for economy
♦ Sen. Boxer: Attack on environment continues
♦ Rep. Hastings: Actions louder than words for Obama on energy
♦ Rep. Markey: Drill here, sell there, pay more
♦ Rep. Whitfield: White House is all talk on its energy strategy
♦ Rep. Olson: We need to reduce dependence on foreign oil
♦ Rep. Latta: Obama doesn’t back up his energy rhetoric